These are non covered bonds.
This is a Tax-Exempt OID Bond from California acquired 2014 and maturity date 2017. Every year I get a tax exempt obligation of around 350 (it increases each year) and a market discount accretion of around 30. I want to know whether this $350 must be paid every year? Or do I have the option of waiting until the end? It does not effect my federal taxes (1040) but does effect my state taxes (140) since this bond is non-resident.
I presume I should report the market discount accretion in the OID Box. 4. So do I report the OID discount in the Box 11? The brokerage company does not tell me what box and it is not reported on form 1099. I believe it has something to do with it being a non covered bond. However the reckoning will come what it matures (since the IRS appears to know everything).
It is a minor matter in the scheme of things but I would like to get it right.
Thanks for your patience.
